CLIMATE
ACTION
TRACKER
BROWN TO GREEN:
G20 TRANSITION TO A LOW CARBON ECONOMY
China
This Country Profile assesses China’s past, present - and indications of
future - performance towards a low-carbon economy by evaluating
emissions, decarbonisation, climate policy performance and climate
finance. The profile summarises the respective findings from, amongst
others, the Climate Change Performance Index (CCPI, operated by
Germanwatch and Climate Action Network Europe), the Climate Action
Tracker (CAT, operated by Climate Analytics, NewClimate Institute,
Ecofys and Potsdam Institute for Climate Impact Research), and
analyses from the Overseas Development Institute (ODI).
Human Development Index
GHG emissions
per capita
Share of global
GHG emissions
Share of
global GDP
GDP
per capita
(tCO2e/cap)
G20
average
0.72
9.2
23.6%
0.82
0
8.7
1
G20
average
G20 average
Source: UNDP, data for 2015
Source: World Bank Indicators, data for 2012
$
16.3%
$
$
$ 10,241
$ 15,071
Source: IEA, data for 2013
GREENHOUSE GAS (GHG) EMISSIONS
16000
7
6
12000
5
10000
8000
4
6000
3
4000
2
2000
1
0
Emissions per capita (tCO2/capita)
Total emissions (MtCO2e/a)
14000
China is the world’s largest emitter of greenhouse
gases (GHG). Since 1990, emissions have increased
threefold and are expected to further surge until
2030. Emissions from land use, land-use change and
forestry (LULUCF) are in the negative range. China’s
energy-related carbon dioxide (CO2) emissions
account for about three quarters of annual GHG
emissions. In 2011, energy-related CO2 per capita
emissions exceeded the G20 average for the first
time. The CCPI ranks China’s emissions level as
relatively poor with a negative trend.
0
Historic emissions
(excluding forestry)
Current policy emissions projections
(excluding forestry)
30
20
26
20
22
20
20
18
14
20
10
20
06
20
02
20
98
19
94
19
19
90
-2000
Energy-related
CO2 emissions
Energy-related
CO2 emissions per capita
Historic forestry
emissions/removals
G20 average of energy-related
CO2 emissions per capita
Composition of
GHG emissions
77%
N O 5%
CH 15%
F-Gases 2%
CO2*
2
4
CCPI evaluation of emissions level and trend
Level
Weak trend
very poor
poor
medium
good
very good
Strong trend
CO2 emissions
from forestry -4%
*CO2 emissions incl. LULUCF
Source: Annex I countries:
UNFCCC (2015); Non-Annex I
countries: IEA (2014) and CAT (2015)
Sources: Past energy related emissions from the Climate Change Performance Index (CCPI); past non-energy and future emissions projections from the Climate Action Tracker (CAT).
CCPI calculations are primary based on the most recent IEA data; CAT calculations are based on national policies and country communications.
Brown to green: G20 transition to a low carbon economy
China - Country Profile
DECARBONISATION
Energy intensity of the economy
Total Primary Energy Supply per GDP PPP
(MJ per 2005 US dollar)
30
The energy intensity of China’s economy (TPES/GDP) is
steadily falling, but is still above the G20 average. Despite
the country's current position as one of the very poor
performers in the CCPI ranking, the CCPI assessment
notes a positive trend.
25
20
15
10
5
20
12
20
10
20
08
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
0
Energy intensity
CCPI evaluation of energy intensity of GDP
Level
Average energy intensity
in G20
Weak trend
Source: CCPI, 2016
very poor
poor
medium
good
Strong trend
very good
Carbon intensity of the energy sector
Tonnes of CO2 per TPES (tCO2/TJ)
80
The carbon intensity of China’s energy sector (CO2/TPES)
is relatively high, well above the G20 average. Starting
from below 60 tCO2 per TJ, emissions intensity peaked in
2007, slowly dropping since. Projections show this will
continue, but not enough to be in line with the 2°C
compatibility benchmark corridor. China falls into the
very poor category in the CCPI carbon intensity ranking.
The five-year trend shows a positive development.
70
60
50
40
30
20
10
Carbon intensity
(past trend)
Average carbon intensity
in G20
Carbon intensity
(current policy projection)
Global benchmark
for a 2°C pathway
30
20
26
20
22
20
18
20
14
20
10
20
06
20
02
20
98
19
94
19
19
90
0
CCPI evaluation of carbon intensity of energy sector
Level
Weak trend
Sources: Past: CCPI; future projections: CAT
very poor
poor
medium
good
Strong trend
very good
80%
900000 00
70%
80000000
70000000
60%
60000000
50%
50000000
40%
40000000
30%
30000000
20%
Total coal in TPES [TJ]
Share of coal in Total Primary Energy Supply (TPES)
20000000
10%
Coal plays a major role in China's total
primary energy supply: 68% of the country’s
energy supply is from coal. The G20 average
is only one third of China’s share. Future
projections see a reduction, but with an
estimated share of 58% in 2030, the decrease
will not be compatible with the 2°C
threshold.
10000000
0
% of coal (past trend)
% of coal (current policy
projections)
Average % of coal in G20
Global benchmark for a 2°C
pathway (min & max)
Source: CAT
Brown to green: G20 transition to a low carbon economy
30
Evaluation of coal share in TPES
20
26
20
22
20
18
20
14
20
10
20
06
20
02
20
98
19
94
19
19
90
0
Total coal consumption (TJ)
poor
medium
good
Source: own evaluation
China - Country Profile
Renewable energy in TPES and electricity sector
16000000
30%
12000000
20%
10000000
15%
8000000
6000000
10%
4000000
5%
Total renewable energy in TPES [TJ]
14000000
25%
The share of renewable energy in China’s
electricity supply has varied between 15-20% over
recent decades. Future projections show that an
increase of up to 25% can be expected. The share
of renewables in China’s total primary energy
supply has fallen since 1992 and is now at the G20
average level of 11%. The CCPI evaluates China’s
renewable energy level as medium compared to
other countries and recognises a positive trend.
2000000
0
% of renewable energy
in electricity (past trend)
% of renewable energy
in TPES (past trend)
% of renewable energy
in electricity
(current policy projections)
G20 average % of
renewable energy in TPES
Total renewable energy
consumption (TJ)
20
30
20
26
20
22
20
18
20
14
20
10
20
06
20
02
19
98
19
94
19
90
0
CCPI evaluation of renewable share in TPES
Level
Sources: CCPI and CAT
Weak trend
very poor
poor
medium
good
Strong trend
very good
Since 2002, China’s electricity demand per capita has been
surging and has more than tripled over time. Although it is still
below the G20 average, it is expected that this strong rise will
continue beyond 2015.
In line with the country's high coal share, China's electricity
emissions intensity is far above the G20 average. Despite an
observable decrease, future projections show electricity
emissions will stay very high in the coming years.
Electricity demand per capita
(past trend)
Average electricity demand
per capita in G20
Electricity demand per capita
(current policy projections)
30
20
26
20
22
20
18
20
14
Good practice benchmark:
without nuclear or large
hydro potential (Denmark)
Emissions intensity
(past trend)
Average emissions intensity in G20
Good practice benchmark:
with large hydro potential (Norway)
Emissions intensity
(current policy projections)
Source: CAT, 2015
20
10
20
06
0
20
30
20
26
20
22
20
18
20
14
20
10
20
06
20
02
20
98
19
94
19
19
90
0
200
02
1000
400
20
2000
600
98
3000
800
19
4000
1000
94
5000
1200
19
6000
90
7000
19
Emissions intensity of electricity [gCO2/kWh]
Emissions intensity of the electricity sector
Electricity demand per capita [kWh/cap]
Electricity demand per capita
Source: CAT, 2015
Evaluation of the electricity
emission intensity
poor
medium
good
Source: own evaluation
Brown to green: G20 transition to a low carbon economy
China - Country Profile
CLIMATE POLICY PERFORMANCE
Climate policy evaluation by experts
Checklist of the climate policy framework
The CCPI 2016 saw China get a relatively good
evaluation by national experts, improving its score
from last year. They value China’s efforts in reducing
its electricity emissions by heavily promoting
renewables. To stabilise this trend, experts demand
more ambitious structural changes, especially in the
energy sector.
Low emissions development plan for 2050*
2050 GHG emissions target
Building codes, standards and incentives for low-emissions options
Support scheme for renewables in the power sector
The CCPI evaluates a country‘s performance in national and
international climate policy through feedback from national energy
and climate experts.
Emissions performance standards for cars
Emissions Trading Scheme (ETS)
very good
Carbon tax
good
* Understood as decarbonisation plans and not specifically as the plans called for in
the Paris Agreement
medium
Source: Climate Policy Database, 2016
poor
CCPI evaluation of climate policy
poor
medium
good
6
5
01
01
I2
CC
P
4
CC
P
I2
3
01
2
01
I2
CC
P
I2
CC
P
1
01
01
I2
0
very good
CC
P
I2
CC
P
9
01
00
I2
CC
P
I2
I2
CC
P
very poor
CC
P
00
8
very poor
CCPI edition
National
International
Source: CCPI, 2016
Compatibility of national climate targets (INDCs) with a 2°C scenario
16000
Max
Min
Total emissions (MtCO2e/a)
14000
12000
10000
Max
8000
6000
Min
4000
2000
0
Historic emissions
(excluding forestry)
Historic forestry emissions/removals
sufficient
Source: CAT, 2015
Brown to green: G20 transition to a low carbon economy
role model
30
20
26
20
22
20
Emissions in INDC scenario (min & max)
CAT evaluation of China’s Intended National
Determinded Contributions (INDC)
medium
18
Fair emissions reduction range
in a 2°C pathway
Current policy emissions
projections (excluding forestry)
inadequate
20
14
20
10
20
06
20
02
20
98
19
94
19
19
90
-2000
China submitted its INDC on 30 June 2015. It
included a target to peak CO2 emissions by 2030 at
the latest, and to reduce the carbon intensity of
GDP by 60–65% below 2005 levels by 2030. Other
targets included increasing the share of non-fossil
energy in total primary energy supply to ~20% by
2030, and to increase forest stock volume to ~4.5
billion cubic metres above 2005 levels.
China’s INDC action, with the exception of the
carbon intensity target, would reduce emissions in
2025 and 2030 to levels rated as medium by CAT.
The emissions resulting from the 2030 carbon
intensity targets, taken in isolation, would be
significantly higher, and were rated as “inadequate.”
The CAT analysis shows the carbon intensity targets
would only be reached through implementation of
ambitious national policies and actions, which at
the moment appears unlikely. China therefore gets
a hybrid rating “medium with inadequate carbon
intensity targets.”
Total GHG emissions are likely to continue to
increase in 2030, as few specific actions are
proposed to address non-CO2 GHG emissions. The
difference between the INDC carbon intensity goal
and national actions and goals already
implemented is significant, and may reflect a desire
by the Chinese government to have a “safe”
international goal.
China - Country Profile
FINANCING THE TRANSITION
Investment attractiveness
Allianz Energy and
Climate Monitor
MEDIUM
RECAI* (E&Y index)
Category (own assessment)
The indices rate China’s investment attractiveness medium to high, due
to a coherent, reliable green policy environment, good domestic
technology experience, value chains and activity in renewables, and
consistent investment flows. However, China needs to improve on
macroeconomic fundamentals like depth of financial institutions and
capital markets, which pulls its score lower than more attractive OECD
countries.
HIGH
Sources: Allianz Energy and Climate Monitor and RECAI reports
Trend**
*Adapted from RECAI and re-classified in 3 categories
(low, medium, high) for comparison purposes with Allianz Monitor.
**Taken from RECAI issue of May 2016
The Allianz Energy & Climate Monitor ranks G20 member states on their relative fitness
as potential investment destinations for building low-carbon electricity infrastructure.
The investment attractiveness of a country is assessed through four categories: Policy
adequacy, Policy reliability of sustained support, Market absorption capacity and the
National investment conditions. The Renewable Energy Country Attractiveness Index
(RECAI) produces score and rankings for countries’ attractiveness based on Macro
drivers, Energy market drivers and Technology-specific drivers which together
compress a set of 5 drivers, 16 parameters and over 50 datasets.
Historical investments in renewable energy and investment gap
This section shows China’s current investments in the overall power sector (including distribution and transmission) as well as in
renewable energy expressed as the share of the total annual investments needed to be in line with a 2°C compatible trajectory.
Investments
in the power sector
% of current investments
in the power sector
compared to
the investment needs
under a 2°C pathway
50%
Investments in renewable energy
for the power sector
44%
% of current investments
for renewable energy
in the power sector
compared to
the investment needs
under a 2°C pathway
Source: Adapted from WEIO, 2014(1)
WEIO (2014) compares annual average investments from 2000 to 2013 with average annual investments needed from 2015 to 2030 under a 2°C scenario
(1)
Carbon pricing mechanisms
Emissions Trading Schemes (ETS)
An ETS caps the total level of GHG emissions and
allows industries to trade allowances based on
their marginal abatement cost. By creating a
supply and demand for allowances, an ETS
establishes a market price for GHG emissions.
In 2013, China started seven pilot Emissions Trading Schemes at a
sub-national level (Beijing, Guangdong, Shanghai, Shenzhen, Tinajin,
Chongqing). When combined, the sub-national ETSs will cover 1.3
GtCO2e, which represents about 12% of the national emissions. Two
years later, China announced plans to introduce a national ETS in 2017,
which will cover eight sectors and is expected to form the largest
national carbon pricing initiative in the world in terms of volume.
Carbon Tax
A Carbon tax directly sets a price on carbon by
defining a tax rate on GHG emissions or – more
commonly – on the carbon content of fossil
fuels. Unlike an ETS, a carbon tax is a price-based
instrument that pre-defines the carbon price,
but not the emissions reduction outcome of a
carbon tax.
GHG
Sources: World Bank and Ecofys, 2016; other national sources
Brown to green: G20 transition to a low carbon economy
China - Country Profile
Fossil fuel subsidies
State-owned coal dominates energy production in China. China provides a host of support measures like tax exemptions for fossil fuel
production, direct budgetary spending for state-owned fossil fuel producers, R&D support to enhance fossil fuel production, and import
duty waivers for fossil fuel equipment. While such support was previously central to China’s economic growth model, concerns about air
pollution and the impact of fossil fuels have changed the government’s development focus, with emerging policies aiming to cap coal
use, peak GHG emissions, and increase the non-fossil fuel share. In 2007, China phased out pre-tax subsidies by relaxing coal price
controls in favour of market based pricing.
Average annual
national subsidies (2013-14)*
China
G20 total
% of government’s income
from oil and gas production (2013)*
$3.4 billion
3.7%
$70 billion
Source: ODI, 2015
*The indicators above refer only to subsidies for fossil fuel production, and include direct spending (e.g. government budget expenditure on infrastructure that
specifically benefits fossil fuels), tax expenditure (e.g. tax deductions for investment in drilling and mining equipment) and other support mechanisms (e.g.
capacity mechanisms).
Public climate finance
China is not a signatory to Annex II of the UNFCCC, and it is therefore not formally obliged to provide climate finance. While
climate-related spending by multilateral development banks may exist, it has not been included in this report.
Brown to green: G20 transition to a low carbon economy
China - Country Profile